FRAMINGHAM, 10 FEBRUARY 2010 - Identity fraud hit more victims last year, increasing 12 per cent to an estimated 11.1 million adults in the United States, according to new data.
The total cost of identity fraud reached US$54 billion, according to the "2010 Identity Fraud Survey Report" published Tuesday by Javelin Strategy & Research. Each case cost an average of $4,841, though some totaled $50,000 or more. Victims were generally protected from fraudulent payment card charges because of existing zero-liability laws and policies by financial institutions. Still, the average cost to a victim of identity fraud reached $373 for out-of-pocket expenses to resolve the problem; that's the lowest amount reported since Javelin started its annual study seven years ago.
The bulk of the cost of identity fraud -- about $4,500 per average case -- was borne by banks and merchants, according to James Van Dyke, Javelin's founder and president. Identity fraud "s easier than it should be," Van Dyke says, noting banks are still struggling to find a way to prevent it.
Javelin's study was conducted through a telephone poll last year of about 5,000 adults who were asked 50 questions related to any identity fraud they suffered in 2009. The results were extrapolated to represent the U.S. population as a whole to show that 4.8 per cent of U.S. adults were hit last year.
Javelin's survey results suggest that payment-card-related fraud is the most common type of crime. About a third of the time, someone will open a new account in the victim's name. The perpetrator is often someone the victim knows, such as a family member or presumed friend, Van Dyke notes.
Resolving identity fraud crime takes about 21 hours on average, down from 30 hours reported the year before. Roughly half the victims filed police reports and prosecuted fraudsters when they could.
For the first time, Javelin asked about mobile phone-account fraud and found 29% of identity-fraud victims reported mobile phone accounts were fraudulently opened in their names.
Young adults aged 18 to 24 years old took about twice as long to detect fraud compared to other age groups, the report asserts. Van Dyke says these young adults may not be monitoring their credit reports frequently enough.
Identity fraud can be traced to old-fashioned methods such as physical theft of documents and trickery, as well as Internet-age methods of stealing personal information such as cybercrime botnets, phishing and data breaches. Van Dyke indicates he didn't want to characterize one type as more significant than another, and said people should take steps to defend themselves in every regard.
According to Javelin, this would include protecting paper documents; installing antimalware protection on computers; never responding to requests for personal or account information, online or over the phone; and refraining from accessing secure Web sites using public Wi-Fi.
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